Elections are drawing near and politicians have started to do what they do best. Many on the opposition side believe they have happened on a big kahuna; to continue to harp on poverty in the land. Poverty is an enigmatic subject. It will always grab attention. And like even the Holy Books say, no society can totally do away with poverty among its populace. I was taken aback recently on a trip to Switzerland to find that there were plenty of poor people even in that nation with its reputation for wealth. Geneva is said to have the highest density of billionaires – perhaps in the world. It was where many misguided leaders from Africa went to hide their loot – many of which became inaccessible after their passing due to their banking secrecy laws. Yet, on a stop at a local petrol station, there they were, white citizens of the cold country, who were obviously out of sorts, looking for a quick buck for survival.
But as much as politicians want to steer the argument permanently into one ‘profitable’ cul-de-sac – poverty – it behooves on the rest of us to properly dissect what our economic issues are from a purely professional or economic angle. The problem with the opposition strategy – which must quickly be examined and hopefully be discarded – is that with over 200 million people living in Nigeria, and in a country with legacy mismatch of economic ideology stemming from colonialism, there will surely be a proportion of the population who are struggling for survival. This is made worse by the fact that we live in a brutal, unforgiving world where the winners take it all. Still, it is a subject worthy of dissection.
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I write this article on the backdrop of reports from many think-tanks to the effect that poverty will or have increase(d) in Nigeria. The last one was by Agora Policy (63 per cent poverty). Before Agora was PriceWaterhouseCoopers, the consulting firm, and the NESG (Nigerian Economic Summit Group). Also, multilateral agencies such as the World Bank and the International Monetary Fund have yearly put out reports to the extent that Nigerians are getting poorer. With the consistency of such reports over the years, I believe that we should expect the tide to turn at some point. It is beginning to look like the default position whenever Nigeria is being contemplated among these bodies, is that the economic situation can only get worse, not better.
I believe though, that after rain comes the sun. Economists talk about cyclicality, boom and bust, growth and deceleration. The current administration of President Bola Ahmed Tinubu has taken some considerable steps, putting in place serious reforms that many leaders prior had shied from. These reforms are paying off. The Naira reform has brought more attention to the local economy and local currency. This is likely one of the key reasons why Nigeria has had 10 consecutive quarters of trade surpluses, with the numbers increasing per quarter. Nigeria has seen a reversal of some flows – lesser emigration, more foreign schools opening branches in Nigeria, and a reduction in health tourism outflows while many of our people abroad now come home for many procedures from fertility, to dental, to more serious concerns. Nigeria’s petroleum sector reforms has accelerated a new industry, championed by Dangote Industry at the downstream subsector, but with burgeoning investment at the upstream subsector. The midstream has been almost totally transformed by new investments.
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All these should result at some point in a turnaround. Again, after the rain comes sunlight. And that is why some of us must try to consciously open the eyes and minds of our people to the possibilities and realities. Is poverty increasing in Nigeria? Is the situation simply getting worse and worse with no remedies? What does the data say? We must note that there is a tendency for people who are finding things easier not to own up easily. That is the natural wiring of an average individual, after all the achievement of one goal leads to a morphing of several new goals. But when things go south, human beings would usually become a lot more vocal.
In my view, poverty will always be in the land. For one, there are no countries where there isn’t a bit of it. In the most income-equal countries of the world – say in Scandinavian social democracies – they have enough poor people to bring those countries to a halt. How many really poor people does it take to ground a whole country? Maybe a thousand angry and uncontrollable people. Almost every average sized country with at least 10 million in population inhabits at least 200,000 poor people. The trick then is in how poverty is managed and who seizes the narrative. It is the duty of government to constantly assure the poor and show workings in terms of outreaches and investments that lift the poor from their current state. The psychology of poverty must also be dealt with through nuanced engagement and education. We shouldn’t assume that every poor person wishes to join the Joneses. Many are too entrenched, even generationally, especially on our continent. It will take decades of continuous engagement and investment – and sometimes relocation – to reposition millions of our people from abject poverty to at least a decent existence.
As it pertains to inequality, I favour this as a much bigger concern for Nigeria for several reasons – even though the numbers suggest otherwise. Nigeria’s Gini Coefficient – which I had written about on these pages earlier – stands at 33.9 per cent according to the 2022 survey by United Nations. One could argue that the situation could have become a little worse because of the initial two critical reforms of 2023 (oil subsidy abolishment and Naira rate liberalization), but there is no new data for that yet. Moreso, we should understand a critical peculiarity with Nigeria – our people are very aspirational, outspoken, and assertive. That is why we have the highest density of small entrepreneurs perhaps in the world. Also, the Nigerian economy, more than any in sub-Saharan Africa, is being run, managed and owned by citizens of Nigeria. And I mean people who are truly indigenous to the land. This is not so for most of our peers – South Africa, Kenya, Zimbabwe, Zambia, Namibia, Cote D’Ivoire, DR Congo, Gabon, Angola, and even nearby Ghana. I tell people often that for a long time, Nigerians have been left to our own devices by the international community – to do and undo with our economy. This has its advantages and disadvantages. For one, more of our wealth goes into the hands of our own people – even though we must work on the misguided culture of neglecting domestic for foreign investment by our super rich – too much of Nigerian money heads abroad and never return.
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Still, Nigeria’s income equality is far better than many respected countries such as the USA (41.6 per cent), Brazil (51.6 per cent), Argentina (42.4 per cent), China (36 per cent), Turkiye (44 per cent), Mexico (42 per cent), among others. The evidence in favour of this is borne out in the fact that there is really no class system in Nigeria (unlike India which has somehow made her way to being the 4th most equal country in the world at 25.5 per cent Gini Coefficient. In spite of our frequent bickering on social media, any Nigerian can become a billionaire overnight, and thousands more are availed opportunities for fairly decent existence by their ‘connection’ which doesn’t necessarily have to be tribal, racial or religious. Just ‘connection’. We are also finding that those who have some value to add – even if it was simply to make music, a skit, or comedy, much less our young dudes in the Fintech space – are transforming into wealth almost overnight. Again, our aspirational and outspoken nature kicks in, making Nigeria dominate the region and beyond in cinematography, music, comedy, banking and finance, and lately, technology and Fintech. We even are the second biggest country in the world in terms of cryptocurrency trading! And the last time I checked, I doubt if there is any country in the world where they lavish money in frequent parties and nightclubs as we do. We have simply laid our own rules in this world and for how long we can keep up, I don’t know. Mind you, we run a cash economy, where we manage to afford what other people rely on credit for – houses, cars, phones, education, and what have you. All paid in cash and taken for granted.
Two observations that should make us rethink the poverty and inequality hypotheses are that corporate profits are skyrocketing in Nigeria in recent years, and the world at large is facing what economists call a k-shaped recovery. Several newspaper reports since 2025 have reported higher profitability and stability for large companies in Nigeria. This trend has picked up steam in 2026. As usual, these news items are muted for the sensationalist narrative of a perpetually growing poverty. Perhaps the question we should ask is why these profits are not flowing into the bank accounts of our citizens. The answer may be that the employment space is not growing – as a global concern. If we go down this route, we may then have a discussion that attempts to solve a serious problem. What can Nigeria do to ensure that more of our people are employed? This phenomenon correlates with the k-shaped recovery that economists world over are talking about; that since COVID-19 ended, the rich seem to be getting richer and the poor, poorer. In fact, the super rich like Bill Gates, Mark Zuckerberg, Elon Musk and Jeff Bezos have since quadrupled their wealth.
What is the Tinubu government doing to reduce the harsher effects of this k-shaped recovery, the growing global inequality, the effect of artificial intelligence in shrinking job opportunities as companies get smarter and more efficient? The answer can be found in some of the reforms that have freed up more resources for public works (Naira reforms, tax reforms, NNPC crude oil and gas proceeds reforms and fuel subsidy removals). The tax reforms especially places more of the burden on Nigeria’s super-rich – many of whom moonlight in the informal economy. Low income earners have been totally freed from paying taxes. In addition to this, Mr President has since ordered the recruitment of more security service men – forest rangers, policemen, even soldier. That process is ongoing, silently, and more than 300,000 young Nigerians are being headhunted into these roles. Equally, more teachers and medical workers are being recruited. One of the surest ways of reducing poverty and inequality is to put more money into people’s hands for work done. This is apart from increasing the minimum wage across board and ensuring that states and local governments get more liquidity. States and LGs are where most of our people live, not the Federal Capital Territory – which has its own government anyway. Today, many of our states are sitting pretty while even the Federal Government struggles with a huge burden of responsibility and not enough money to finance them. Nigerian states paid down almost 40% of their global debts in 2024 and most have not borrowed a dime in years! I therefore think those reporting a one-way increase in poverty in Nigeria are not doing a nuanced job.
Having hopefully established that neither poverty not inequality could be Nigeria’s biggest challenge – even though I place a bit more emphasis on inequality among the two – let us look at the 3rd factor: informality.
I think the real problem with Nigeria is the informality of our economy. Many efforts have been made to encourage our people to formalize their transactions but many are decidedly avoiding that perhaps because of taxes. For me, this is beyond taxation but about capturing the real size, nature, characteristics, and behavior of our economy. Formalizing the economy is about understanding exactly how we are to forge ahead. We cannot understand how to make progress except we understand our economy. We cannot understand our economy when almost everybody is hiding their real wealth and preferring instead to spread the fib that the economy is dying. I mentioned earlier how Nigeria was listed as the second highest cryptocurrency country – in the world. I had also used the example of how MTN the telephone company makes 40 per cent of its turnover and profit in Nigeria alone, even though it trades in 13 countries globally. This was the same Nigeria that some top global consultants wrote off in 2001 as not being able to do more than five million mobile phones. We have over 200 million today! This is the same Nigeria where people build their houses from scratch to finish and start to fret that they don’t have two, or three. Families own six to 20 cars – all paid down – and still say the country is bad. The same Nigeria where we spend on lavish weekend parties like nowhere else in the world. We are quite attached to our luxuries and indeed we are living life with our own rules which the world just marvels at.
For how long we can keep living this way I don’t know. The credit and insurance markets must grow more, to begin to bring us closer to what obtains in those countries we admire and hopefully create the semblance of more equality and less suffering. Governments at every level must continue to provide the basics – especially employment in critical sectors that provide the much-vaunted enabling environment (in education, health, security, and environment). The idea that only private sector can or must create jobs is a fallacy especially for a growing country like ours and we needn’t be pushed by insecurity, mass illiteracy, decaying environment and scorn from the rest of the world before we are forced to do the right thing. If the tax reforms work the way I hope they will, government should get more data that closes this formality gap, generates more legitimate funds from quarters that have excess, and begins to translate into a better world for every Nigerian.
‘Tope Fasua is the special adviser to the President on Economic Matters.
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